Consortia and Subcontracting in EU Public Works

It is 22.47. The tender closes at midnight.

Marta has the folder open. Four entities are in this consortium. Each one has its own ESPD. Or should have. She is looking at the file names: ESPD_Consortium_Lead_final.xml, ESPD_Sub1_v2.xml, ESPD_FinancialPartner_FINAL_FINAL.xml. There is no ESPD for the fourth entity. The one whose balance sheet they are using to clear the financial standing threshold.

Forty-seven pages of technical proposal. A consortium agreement signed last Tuesday. A commitment letter from the capacity-lender sitting in someone’s email drafts folder. Unsigned.

Thirteen minutes to go.

This is not bad luck. This is a structure problem that nobody named until now.

What the Directive actually says

Article 19(2) of Directive 2014/24/EU is unusually generous. Groups of economic operators — consortia, joint ventures, informal alliances, whatever legal shape they take — may participate in procurement. They cannot be required to have a specific legal form just to submit a tender.

That comes later. Article 19(3) allows a contracting authority to require the group to adopt a specific legal form once it has been awarded the contract, but only to the extent necessary for satisfactory performance. Joint and several liability, for example, is a legitimate reason. Recital 15 mentions it explicitly. The authority cannot demand you incorporate before you bid. It can, after award, require that you formalise liability.

These are two distinct moments. They carry different obligations. Conflating them at tender stage is a common mistake.

The capacity-borrowing mechanism

Article 63(1) is where the real architecture is. An economic operator may rely on the capacities of other entities, and the Directive says this expressly: regardless of the legal nature of the links between them.

Parent company, subsidiary, consortium partner, unrelated third party with relevant experience. None of that matters for the purpose of borrowing capacity. What matters is that you can prove disposal of those resources. Typically, you do this by producing a commitment from the entity whose resources you are relying on. A letter. Signed. Specific. Dated before the deadline.

But Article 63(1) contains a constraint that is easy to misread. For criteria relating to educational or professional qualifications, or to relevant professional experience, reliance is only permitted where the entity providing those capacities will actually carry out the works or services for which those capacities are required.

Lend your track record and you must show up on site. This is not a formality.

The Court of Justice addressed this directly in Esaprojekt (C-387/14). An operator cannot claim credit for experience in a consortium project if it did not actually perform the relevant part of that work. You cannot aggregate histories that are not yours to aggregate. And you cannot remedy a missing qualification by adding capacity after the deadline has passed. The bid is what it is at closing time. The Court also accepted that, where the nature of the works justifies it, a contracting authority may require certain tasks to be performed by a single operator, provided that requirement is proportionate.

Earlier, in Swm Costruzioni 2 (C-94/12 — decided under the 2004 predecessor directive but with principles that carried forward), the Court held that a blanket prohibition on relying on more than one undertaking for the same qualification category is incompatible with EU law. Combining the experience of two firms to meet a single criterion can be legitimate. A general prohibition is not.

The balance sheet question

Economic and financial standing is different. Article 63(1) allows a contracting authority, where a tenderer is relying on another entity’s economic and financial standing, to require that the tenderer and that entity be jointly liable for the performance of the contract.

Note the word: may. This is not automatic. It is a discretionary power the authority can choose to exercise. When they exercise it, the liability is not symbolic. It covers the whole contract.

If you are the entity lending your balance sheet to a consortium, that sentence is the one that matters. You may be signing up for joint and several liability for a contract you will not manage and may barely be involved in delivering. Your commitment letter is not administrative paperwork. It is a risk transfer document.

Contracting authorities also have enforcement obligations on the other side. Where a relied-upon entity fails to meet a selection criterion, or falls within a ground of compulsory exclusion under Article 57, the authority must require its replacement. The consortium does not get to shrug. Someone else must be found.

Subcontracting is not the same as capacity-borrowing

These two mechanisms are frequently confused, and the confusion is expensive.

Subcontracting under Article 71 is about who performs the work after award. Article 71(2) allows authorities to ask tenderers to indicate the share of the contract they intend to subcontract and who the proposed subcontractors are. Article 71(6)(b) gives authorities the power to verify named subcontractors against Article 57 exclusion grounds, and in cases of compulsory exclusion, requires replacement.

Critically: a separate ESPD for subcontractors is required only where the contracting authority specifically requires it. For entities whose capacities you are relying on under Article 63, a separate ESPD is always required.

This distinction matters at 22.47 when you are counting files.

As for percentage caps: the Directive sets none. The Court was unambiguous in Vitali (C-63/18). A national rule capping subcontracting at 30% across the board was held incompatible with Directive 2014/24. The same logic follows from Wrocław (C-406/14), where the Court found a contracting authority cannot require a tenderer to perform a fixed percentage of the works with its own resources. Proportionality is permitted. Abstract caps are not.

The real constraint on how much you subcontract is not a number in a statute. It is whether the delivery structure you describe is coherent and whether the entity taking on the risk is visible in the documents you submit.

The ESPD is not a form, it is a commitment

The European Single Procurement Document under Article 59(1) and Regulation (EU) 2016/7 is a self-declaration. Each group member submits one. Each entity whose capacities are being relied on submits one. Where the authority requires it, named subcontractors submit one.

Four entities, potentially four documents. Each one a declaration that the entity is not excluded, meets the relevant criteria, and will supply what the commitment letter promises.

When Marta pulls last month’s ESPD into the folder, the problem is not that the file has the wrong date. The problem is that the declaration covers a different moment in time. The exclusion check, the qualification claim, the commitment to perform — all of it anchors to the date on the form.

Most procurement teams treat the ESPD as the last file to gather. It should be the first structural question: who exactly is in this bid, in what capacity, borrowing what, committing to what, and can each of them sign a current declaration before the deadline?

What actually needs to happen

Map the entities before you draft anything else. Consortium members, capacity-lenders, named subcontractors if required. Assign each one a role: performing entity, financial capacity provider, both.

For each performing-capacity lender: confirm in writing, specifically, which works or services they will carry out. Esaprojekt says the link between the experience and the future performance must be real.

For each financial-capacity lender: read the authority’s requirements. If joint liability is on the table, the entity signing that commitment letter needs to understand that before they sign it.

For each ESPD: check the date. Check that the declarations match the role. Check that the file is in the system.

Then look at the subcontracting plan. Not to satisfy a percentage cap — there is no valid one — but to make the delivery logic legible. Who does what. How oversight works. Whether the authority needs to approve substitutions.

Steinlog exists because this coordination problem is real and recurring. The folder on the shared drive with ESPD_final_v3_ostateczna.docx is a symptom, not the cause.

The cause is that consortium bids have a structural complexity that a deadline hides until it doesn’t.

It is 22.58. Marta finds the commitment letter in drafts. She sends it to the fourth entity. She waits.

The Directive allows this bid to exist. The question is whether the documents do.